Article 26

Should the taxation authorities, upon possession of evidence, conclude that a taxpayer engaged in production and operations have conducted some activities of averting taxation obligations, they may, before the expiry of the set period of time, order the taxpayer in question to pay the payable tax in a term limit; should, in a term limit, there be obvious signs that the taxpayer is moving away and hiding its taxable commodities, goods and other assets or taxable income, the taxation authorities may order the taxpayer to provide a tax payment guarantee. Should the taxpayer be unable to provide a tax payment guarantee, with the approval of the director of a tax bureau above the county level, the taxation authorities may take the following tax preservation measures:

(1) Give a written notice to the account-opening bank of the taxpayer or other financial institutions, requesting them to suspend the withdrawal of a portion of the taxpayer's deposits equivalent in value to the taxable amount; and

(2) Detain and seal up the portion of commodities, goods and other assets equivalent in value to the taxable amount.

In case that the taxpayer pays the tax in the term limit as specified in the above paragraph, the taxation authorities shall immediately remove the tax preservation measures; in case that the payable tax is not paid upon the expiry of the term limit, with the approval of the director of a tax bureau above the county level, the taxation authorities can issue a written notice to the account-opening bank of the taxpayer or other financial institutions to withhold the tax amount from the deposits whose withdrawal has been suspended, or auction the detained and sealed up commodities, goods or other assets and use the income generated from the auction to compensate for the taxable amount.

In the event that inappropriate tax preservation measures are taken, or in the event that the taxation authorities fail to lift the tax preservation measures after the taxpayer has paid the taxable amount in the term limit, as a result of which the legitimate interests of the taxpayer have suffered losses, the taxation authorities shall be held accountable for paying damages.